Mountview Estates

17 May 2024
By Maynard Paton

H1 2024 results summary for Mountview Estates (MTVW):

• A satisfactory H1 performance, showing revenue up 5% and profit up 16% buoyed by the gross margin on property sales rebounding to a reassuring 59%.

• Despite a hefty £29m spent acquiring new properties, greater debt, higher interest costs, extra tax and the chunky dividend kept net asset value (NAV) at approximately £101 per share. 

• Properties purchased after a 2014 valuation and then sold look to have realised limited gains, and could explain why NAV growth has slowed and the share price has stagnated during recent years.

• The protracted search for a replacement non-exec could spark further tensions between the board and unhappy shareholders, with the chief executive still entrenched through family support albeit with no obvious successor.

• The £100 shares currently offer a 5% income, the highest for decades aside from the banking crash, and could be worth £189 if all the group’s properties were sold today at their vacant possession value. I continue to hold.

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28 October 2023
By Maynard Paton

FY 2023 results summary for Mountview Estates (MTVW):

• A lacklustre FY performance, with profit down 2% to the lowest level for ten years despite average property sales (excluding ground rents) rising 14% to a record £395k.

• Property sales achieving a 50% gross margin, the worst for 14 years, suggest properties purchased following a 2014 valuation have realised very limited premiums on disposal.   

• Debt remains under control at 12% of the property estate, although £56m was spent on new properties — the largest amount since FY 2008 — despite management talk of ongoing “difficult economic circumstances“.

• Protest votes against the board’s composition and remuneration continue to increase, with property investor David Pears among the unhappy shareholders asking questions at the latest AGM.

• The £100 shares trade at net asset value (NAV), which in theory prices in no future property gains, and offers a 5% income, the highest for decades aside from the banking crash. I continue to hold.

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16 May 2023
By Maynard Paton

Results summary for Mountview Estates (MTVW):

• A positive H1 2023 performance, with revenue up 21% and profit up 17% due to property selling prices gaining 19% and a greater number of properties sold. 

• A significant £26m spent on new properties implies buying opportunities are emerging as “difficult times” and “economic storms” are forecast.

• A 54% sales premium was realised against the 2014 Allsop valuation, and the remaining Allsop-valued properties now represent less than half of the property estate. 

• Net debt remains very modest at just 6% of the property estate and allowed the welcome declaration of a 250p per share/£10m special dividend. 

• The £115 shares trade at a lowly 13% premium to net asset value, which inched higher to a fresh £102 per share high, although the balance sheet could one day still be worth £200 per share. I continue to hold.

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02 September 2022
By Maynard Paton

Results summary for Mountview Estates (MTVW):

• A steady FY 2022 performance, buoyed by an H2 that saw property sales achieve a record £379k average and realise a 66% premium to their 2014 Allsop valuation. 

• The final dividend was lifted 11% while expenditure on new properties fell to a 13-year low after management expressed a desire to “not chase purchases at any price“.

• Net debt remains very modest at just 5% of the property estate and reflects management’s concerns of forthcoming “difficult economic circumstances“.

• Friction between major shareholders continues, with revised director-pay arrangements perhaps encouraging significant protest votes at the latest AGM.  

• Net asset value remains at £101 per share, although the balance sheet could be worth £210 per share assuming all owned properties enjoy immediate ‘reversionary’ gains and are then sold at fair-market value. I continue to hold.

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25 March 2022
By Maynard Paton

Results summary for Mountview Estates (MTVW):

• An acceptable H1 performance, albeit profit was suppressed by fewer property sales that in aggregate achieved a relatively low gross margin.

• Certain property disposals realising a record 65% premium to their 2014 valuation alongside an £11m special dividend do not suggest inherent trading difficulties.

• Management remarks of “difficult times that may lie ahead” may explain why expenditure on new properties remains low and net debt has been kept at just 4% of the property estate. 

• The special dividend, low expenditure and modest debt all perhaps signal a new ‘run off’ chapter, whereby the group consistently sells more properties than it buys.   

• Book value inched to a record £102 per share, although run-off guesstimates suggest total dividends following a complete estate disposal could total £264 per share. I continue to hold.

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15 July 2021
By Maynard Paton

Results summary for Mountview Estates (MTVW):

• A respectable performance supported by a remarkable H2 comeback, with full-year profit up 5% after declining 18% during a pandemic-disrupted H1.

• Property sales realising a welcome 1.55x premium to their 2014 valuation alongside the first dividend lift for three years suggest favourable near-term trading. 

• A small text change to AGM-related statements imply some unhappy shareholders have started to engage with management. 

• Debt of £22m stands at a 21-year low and represents just 5% of the £398m property estate.

• Book value inched to a record £101 per share, although my calculations still point to a balance sheet inherently worth beyond £200 per share. I continue to hold.

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04 December 2020
By Maynard Paton

Results summary for Mountview Estates (MTVW):

• A pandemic-affected H1 that showed revenue down 23% and profit down 18% following procedural delays to property sales.

• A maintained dividend, a lack for furloughed staff and rents up 1% did not signal inherent lockdown trouble. 

• Significant gross-margin enhancements may reflect an underlying step-change in performance and have favourable implications for valuation. 

• Expenditure on property purchases has picked up, with management hopeful of acquiring “exceptional opportunities”. Debt levels remain modest.

• Book value inched to a record £98 per share, although new profit assumptions now point to a balance sheet possibly worth up to £225 per share. I continue to hold.

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13 August 2020
By Maynard Paton

Results summary for Mountview Estates (MTVW):

• Standstill 2020 figures that showed 8% more properties sold at prices 9% lower than last year.

• A maintained dividend, a lack for furloughed staff and the directors currently being “happy in the auction room” underline some pandemic-resilient qualities. 

• Net debt representing a very modest 8% of the group’s property estate suggests significant scope to pick up any property bargains.

• This week’s AGM witnessed a further bout of protest votes against the independent non-executives, the board’s pay and the auditors.

• MTVW’s book value increased by 3% to a record £97 per share, although my calculations suggest the balance sheet could be worth £200-plus per share. I continue to hold.

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28 December 2019
By Maynard Paton

Results summary for Mountview Estates (MTVW):

• Brexit “uncertainties” led to a dull performance, with revenue falling 1%, underlying operating profit improving 1% and an unchanged dividend.

• An improved gross margin and the disposal of four investment properties for prices well above book were encouraging.

• Debt represents a modest 10% of the group’s property estate — which continues to be accounted for at cost.

• This year’s AGM witnessed further protest votes against the independent non-executives, the board’s pay and the auditors.

• MTVW’s book value increased by 4% to £96 per share, although the balance sheet could inherently be worth £200-plus per share. I continue to hold.

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15 July 2019
By Maynard Paton

Results summary for Mountview Estates (MTVW):

• Brexit “uncertainties” led to MTVW’s lowest annual revenue and earnings since 2013.

• At least the dividend was held and net asset value reached a fresh £94 per share high.

• A higher gross margin during the second half was encouraging and may indicate MTVW is enjoying slightly stronger sale prices.    

• Debt represents a low 12% of the group’s property estate — which continues to be accounted for at cost.

• My sums suggest MTVW’s balance sheet could actually be worth £200-plus per share — more than double the recent share price. I continue to hold.

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